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News: UK not alone as house prices fall globally

Fri, 26 Sep 08

Dramatic falls in house price are not just happening in the UK but the whole world, according to new research.

The Global Property Guide shows that although the UK and Ireland are among the markets worst affected by the global property market slide, they are not alone.

The Baltics, the US, and the UK and Ireland led the global decline during the year to the end of the second quarter 2008.

One of the worst-affected markets was Latvia – having previously led the global property boom – where house prices fell 33.08% in the city of Riga in real terms during the period.

Similarly, prices in Estonia’s Tallinn fell by 14.06% in real terms over the same period.

The research uses figures provided by Nationwide to show a 9.77% fall in house prices in the UK during the period.

This compares favourably to major US cities where data shows nominal house prices fell on average by almost 19%.

Overseas property hotspots?

UK investors and holiday home buyers looking to Spain will find that prices have fallen by 2.49% according to official statistics. But the research warns that this data is widely believed to understate the problem.

China’s fast-growth economy has also produced a property boom. Prices in Shanghai, for example, have grown by almost 30% in inflation-adjusted terms.Transaction volumes, however, have fallen sharply over this period and the report says this suggests “that buyers are now nervous”.

The Global Property Guide said: “Quarterly data suggests that things are getting worse, with declines in inflation-adjusted house prices over the quarter in all except nine of the 33 countries tracked.

“Only five countries out of 33, at this stage last year, had seen year-on-year declines in prices in real terms. This year’s total is 21.”  

  

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